A.I. Credit Corp. v. Thomas

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
September 28, 2006
for the Fifth Circuit
Charles R. Fulbruge III
Clerk
No. 05-10705
A.I. CREDIT CORP.,
Plaintiff,
VERSUS
PHILIP R. THOMAS, Etc; ET AL.,
Defendants;
PHILIP R. THOMAS, individually doing business as
Thomas Global,
Defendant-Third Party Plaintiff-Appellant,
VERSUS
CAPITAL MANAGEMENT STRATEGIES, INC.; JULIAN V.
MOVSESIAN,
Third Party Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Texas
(3:03-CV-0298)
Before GARZA, DeMOSS, and STEWART, Circuit Judges.
PER CURIAM:*
Appellant Philip R. Thomas (“Thomas”) appeals the
district court’s grant of summary judgment in favor of
Appellees Julian V. Movsesian (“Movsesian”) and Capital
Management Services, Inc. (“CMS”) (collectively,
“Appellees”). He argues that the district court erred in
finding that his third party claims against Appellees,
which concededly fall outside the applicable statutory
limitations periods, are time barred. Specifically,
Thomas contends that the discovery rule applies to save
his otherwise time-barred claims. We affirm the judgment
of the district court.
Underlying this case is an insurance premium
financing deal between Thomas and A.I. Credit Corporation
(“A.I. Credit”) that Movsesian brokered on behalf of his
company, CMS. The deal enabled Thomas to obtain a
$2,000,000 cash advance, a $22,000,000 life insurance
policy, and the financing necessary to fund the cash
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined
that this opinion should not be published and is not
precedent except under the limited circumstances set
forth in 5TH CIR. R. 47.5.4.
2
advance and the premiums on the life insurance policy.
A.I. Credit provided all of the necessary financing.
According to Thomas, Movsesian promised that Thomas would
pay nothing until he died.
On January 12, 1999, Thomas signed an application for
the $22,000,000 life insurance policy; and on January 14,
1999, Thomas signed the documents related to the
financing of the deal, including a promissory note in the
amount of $3,846,223, an assignment of the life insurance
policy to A.I. Credit as collateral, a personal guaranty,
and five security and control agreements regarding
investment accounts to be used as further security for
the loan. Thomas alleges that all of the documentation
for the financing of the deal went through Movsesian and
that he had no contact with A.I. Credit. He states that
he entered into the loan transaction for the sole purpose
of financing the payment of the premiums on the newly
acquired life insurance policy. Thomas believed that the
cash value of the life insurance policy would be
leveraged to pay the interest cost on the loan until he
died, at which point he thought the insurance policy
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would pay in full all advances of principal and the
accrued interest on the loan. According to Thomas, he did
not think that he would be required to pay annual
interest on the loan because Movsesian promised him that
he would pay nothing until he died and also because
Movsesian told him that the provisions in the loan
documents that provided for payment of interest were just
“typical legal words” that were “covered by the special
premium finance arrangement with A.I. Credit.” Thomas
also alleges that he did not receive any disclosures
regarding the “special premium finance arrangement,” nor
did he receive an insurance premium finance agreement as
required under Texas law. However, Appellees point out
that the promissory note contained a provision that
required Thomas to pay interest on the loan on an annual
basis, and it stated, “This Note is payable in successive
annual installment payments.” The note also stated, “The
undersigned acknowledges that before signing this Note,
borrower has read the Note in its entirety and received
a legible, completely filled-in copy of this Note.”
On January 18, 1999, Thomas sent a check to Movsesian
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in the amount of $110,589, which Thomas claims he
understood to be an origination fee. Appellees, however,
claim that Thomas paid this amount to Movsesian after
Movsesian sent a letter to Thomas indicating that the
amount of prepaid interest due on the loan was $110,589.
No other interest was due on the loan until January 2000.
On January 13, 2000, A.I. Credit faxed Movsesian a letter
indicating that the outstanding interest on the loan was
$119,693.91, and on January 24, 2000, an employee of A.I.
Credit authorized payment of this interest from funds
held in one of the investment accounts used by Thomas to
secure the deal. Thomas acknowledges that he was aware of
this payment of interest and that as of January 2000, he
“knew of the ‘injury’ he had suffered at the hands of
Movsesian,” that is, he knew that he would have to pay
interest on the loan contrary to his understanding of its
terms.
According to Thomas, when he became aware that he had
to make interest payments on the A.I. Credit loan, he
complained to Movsesian about the high cost of the deal;
and Movsesian in turn helped Thomas to surrender the
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original life insurance policy and purchase a new policy
from American General. Thomas claims that after he
purchased the American General policy, there was
confusion regarding the amount of interest due on the
A.I. Credit loan and the length of the grace period under
the American General policy. Whether the result of
confusion or not, the premiums on the American General
policy were not timely paid, the policy terminated, and
Thomas defaulted on the promissory note.
On February 11, 2003, A.I. Credit filed suit against
Thomas,2 seeking recovery under the note and the guaranty
and also seeking a declaration regarding its security
interests in Thomas’s investment accounts. On May 19,
2003, Thomas brought various counterclaims against A.I.
Credit and various third party claims against Movsesian
and his company, CMS. Specifically, Thomas alleged fraud
in the inducement, violations of Article 21.21 of the
Texas Insurance Code, breach of fiduciary duty, negligent
2
A.I. Credit also named Thomas’s company (Thomas
Global), his wife (Wayne Thomas), and various entities
related to Thomas Global as defendants. Only Thomas
appeals.
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misrepresentation, violations of Article 24.11 of the
Texas Insurance Code, promissory estoppel, and
conspiracy. Appellees filed a motion for summary
judgment, contending, in part, that Thomas’s claims were
barred by the applicable statutes of limitations.3 Thomas
responded that the discovery rule applied to save his
claims because he was not aware until January 2000 of his
injury, i.e., that he had to pay annual interest on the
A.I. Credit loan.4 The district court, agreeing with
Appellees that Thomas’s claims were barred by the
respective statutes of limitations and finding that the
discovery rule did not apply to save them, granted
summary judgment in Appellees’ favor. According to the
3
Thomas’s claims were governed either by two-year or
four-year limitations periods: (1) fraud, four years; (2)
violations of the Texas Insurance Code, two years; (3)
breach of fiduciary duty, four years; (4) negligent
misrepresentation, two years; (5) promissory estoppel,
four years; and (6) conspiracy, two years. See A.I.
Credit Corp. v. Thomas, No. 03-cv-00298, at 4 (N.D. Tex.
Apr. 21, 2005) (order granting summary judgment).
4
Thomas also claims that he was unaware that he had to
reapply for financing on a yearly basis; however, he did
not raise this argument before the district court. We
consider it waived. Barrie v. Intervoice-Brite, Inc., 397
F.3d 249, 263 (5th Cir. 2005).
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court, Thomas could not argue that he was unaware until
January 2000 of the annual interest payment requirement
because the terms of the note, signed in January 1999,
indicated that Thomas would have to pay interest
annually. The court cited Martinez Tapia v. Chase
Manhattan Bank, N.A., 149 F.3d 404 (5th Cir. 1998), for
this proposition. On appeal, Thomas concedes that absent
the discovery rule, all of his third party claims are
barred by the respective statutes of limitations.
However, he argues that there is a genuine issue of
material fact as to when he discovered or should have
discovered his injury and that the district court
therefore erred in deciding that the discovery rule does
not save his third party claims.
This Court reviews a grant of summary judgment de
novo, applying the same standard as the district court.
Wheeler v. BL Dev. Corp., 415 F.3d 399, 401 (5th Cir.),
cert. denied, 126 S. Ct. 798 (2005). Summary judgment is
appropriate if “there is no genuine issue as to any
material fact and . . . the moving party is entitled to
a judgment as a matter of law.” FED. R. CIV. P. 56(c); see
8
also Wheeler, 415 F.3d at 401. We view the evidence in
the light most favorable to the non-movant. Id. at 401-
02.
Having carefully reviewed the parties’ briefs and the
relevant portions of the record, we affirm the district
court’s judgment essentially for the reasons stated
therein. Under Texas law, Thomas was put on notice of his
injury as of the date he signed the promissory note. His
arguments to the contrary are unavailing.
AFFIRMED.
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